Brunswick’s BNT unit hurt by market conditions

LAKE FOREST, Ill. – Increasingly challenging market conditions in the portable navigation device segment are affecting the operating performance of the Brunswick New Technologies unit and Brunswick Corp.’s ability to dispose of BNT at or above book value, the company reported in a press release yesterday.

In April 2006, Brunswick announced its intent to sell BNT, which includes fleet management, marine electronics and PND products sold under the Navman, Northstar and MX Marine brands. But increased competition and pricing pressures in the PND market segment are adversely affecting the operating results of BNT’s PND business in the important fourth quarter holiday selling season, the company said.

“BNT is an amalgamation of electronics businesses, primarily based on GPS technologies,” said Dustan E. McCoy, Brunswick chairman and chief executive officer. “As we announced earlier this year, we no longer view ownership of BNT as a strategic imperative and choose to free up resources to more intently focus on our core business segments – marine, fitness, bowling and billiards – and long-term strategic objectives.”

Based on the performance of this operation and very recent discussions with potential buyers, Brunswick has concluded that proceeds from the sale of BNT will be less than its book value. These conditions will result in a non-cash asset impairment charge estimated in the range of $70 million to $95 million in the fourth quarter, primarily driven by the PND business.

“Over the past two months, we have experienced a significant change in the market dynamics for PND products, primarily in Europe where Navman holds the No. 3 market share position,” said McCoy. “While we’ve said all year that the market is becoming increasingly competitive, in November alone we witnessed an even greater level of price discounting, which has adversely affected our PND business unit.

“Nevertheless, we are continuing with the sales process for the PND business as well as the marine electronics and fleet management units, the latter two of which continue to perform at or above expected levels,” McCoy concluded.

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